Kannapien v. Quaker Oats Co.
| Decision Date | 14 November 2007 |
| Docket Number | No. 06-2543.,06-2543. |
| Citation | 507 F.3d 629 |
| Parties | Geri KANNAPIEN and Janice Rozhon, Plaintiffs-Appellants, v. QUAKER OATS COMPANY and PepsiCo, Defendants-Appellees. |
| Court | U.S. Court of Appeals — Seventh Circuit |
Constantine L. Trela, Jr. (argued), Erin Elaine Kelly, Sidley Austin, Chicago, IL, for Defendants-Appellees.
Before EASTERBROOK, Chief Judge, and KANNE and EVANS, Circuit Judges.
Geri Kannapien and Janice Rozhon each accepted a severance package from their employer, the Quaker Oats Company, and retired a few weeks later. The severance package consisted of benefits to be paid pursuant to written plans governed by the Employee Retirement Income Security Act of 1974 (ERISA), 29 U.S.C. §§ 1001-1461. Although Kannapien and Rozhon have received the amounts to which the express written terms of the plans entitle them, they filed suit against Quaker and its parent company, PepsiCo, seeking equitable relief under ERISA, see 29 U.S.C. § 1132(a)(3), alleging that Quaker failed to honor the terms of its Retirement Plan. The district court found that Kannapien and Rozhon had failed to produce any genuine issue of material fact that was in dispute and granted summary judgment for the defendants. See Kannapien v. Quaker Oats Co., 433 F.Supp.2d 895 (N.D.Ill.2006). We agree and affirm the judgment of the district court.
Kannapien and Rozhon filed a class-action suit against Quaker and PepsiCo in late October 2004, alleging various claims under ERISA. In July 2005, the district court struck all class allegations because the case was not properly brought as a class action. The court granted leave to Kannapien and Rozhon to amend their complaint in November 2005 to add two Illinois state-law claims. After this amendment, Kannapien and Rozhon's complaint raised three classes of claims: (1) ERISA estoppel claims under 29 U.S.C. § 1132(a)(3)(B); (2) ERISA claims for breach of fiduciary duty also under § 1132(a)(3)(B); and (3) Illinois state-law claims for breach of contract and promissory estoppel. After discovery, Quaker and PepsiCo moved for summary judgment, which the district court evaluated based upon the pleadings and affidavits submitted by the parties. The record before the district court established the following facts, which we construe drawing all inferences favor of Kannapien and Rozhon. See Sides v. City of Champaign, 496 F.3d 820, 822 (7th Cir.2007).
The Golden Grain Company operated a manufacturing plant in Bridgeview, Illinois, that produced consumer food products such as Rice-a-Roni and Mission Pasta. Golden Grain originally hired Kannapien and Rozhon as salaried employees on January 28, 1980, and May 16, 1977, respectively. Kannapien worked as an administrative assistant and Rozhon worked as a payroll and insurance clerk. During their employment at Golden Grain's Bridgeview Plant, Kannapien and Rozhon participated in the company's Profit Sharing Plan. Benefits under the Profit Sharing Plan consisted solely of financial contributions made by Golden Grain—employees did not make any monetary contributions.
Quaker Oats acquired Golden Grain in 1986, and Kannapien and Rozhon became employees of Quaker. Quaker did not immediately terminate Golden Grain's Profit Sharing Plan upon taking over, but eventually the funds that had accrued under the Profit Sharing Plan were transferred into separate 401(k) accounts for the benefit of the employees. On July 1, 1990, all salaried employees of Golden Grain, including Kannapien and Rozhon, became participants in the Quaker Retirement Plan, an employee pension benefit plan within the meaning of ERISA, 29 U.S.C. § 1002(2).
In 2001, Quaker merged with a subsidiary of PepsiCo, but retained the Quaker name. As a result of the merger, the Quaker Retirement Plan (as relevant to this litigation) was amended and restated on January 1, 2002. Benefits under the Retirement Plan are calculated using an employee's "credited service" time, which the Retirement Plan expressly states does not include any time an employee served before becoming a participant in the Quaker Retirement Plan. The amended Retirement Plan also entitles employees who were involuntary terminated by the company within two years of the merger to change-in-control benefits, which consist of additional monthly payments to eligible employees. The Retirement Plan does not define what constitutes an involuntarily termination.
In addition to the Retirement Plan, Quaker implemented a Severance Plan that also provided benefits to employees who were discharged involuntarily. Unlike the Retirement Plan, benefits under the Severance Plan are determined using a period of time that commences with an employee's date of hire by a company "acquired by Quaker." The benefits under the Severance Plan are unrelated to the basic benefits under the Retirement Plan or to the change-in-control benefits provided under the Retirement Plan, except that both the Severance Plan benefits and change-in-control benefits are available only to involuntarily discharged employees.
In December 2002, both Kannapien and Rozhon received statements that estimated their basic pension benefits under the Retirement Plan. These statements each contained the disclaimer that they merely estimated Retirement Plan benefits and that they were not official Plan documents. The estimate statements further stipulated that "in the event of a conflict between this statement and the official Plan documents, the official Plan documents will govern."
The estimate statement sent to Kannapien contained a clerical error that listed her credited service as beginning on January 28, 1980—her hire date at Golden Grain. But under the express written terms of the Retirement Plan, Kannapien's credited service did not begin until July 1, 1990, the date she became a participant in the Quaker Retirement Plan. Similarly, Rozhon received an erroneous estimate statement that detailed her credited service as beginning on May 16, 1977, her hire date with Golden Grain, instead of the July 1, 1990 date. Despite listing incorrect credited service start dates, the estimate statements received by Kannapien and Rozhon used the proper time interval under the Retirement Plan's terms (from July 1, 1990 to December 2002) to accurately estimate the actual dollar amounts that each would receive under the Plan.
In 2003, following the sale of its Mission Pasta product line, PepsiCo began to decrease production at the Bridgeview plant. In light of this, the Plant Manager, Tom Winters, received approval to decrease the plant's labor costs. In order to reduce its workforce, Quaker offered to give its employees who volunteered for early retirement not only their standard benefits under the Retirement Plan, but also two additional benefits reserved for involuntarily terminated employees. Specifically, employees who elected for early retirement would be deemed eligible to receive benefits under the Severance Plan, as well as the change-in-control benefits under the Retirement Plan.
Accordingly, Winters held a meeting at the Bridgeview plant in early 2003, during which he stated that the company was looking for employees who would be interested in leaving. He directed interested employees to obtain information from Jeffrey Satterlee, the Human Resources Manager. Kannapien, who served as an administrative assistant to Winters, asked Winters if she should consider contacting Satterlee. Winters encouraged her to do so and told her that she "would be very pleased" by the amount she would receive if she left the plant. At the time he made this statement to Kannapien, Winters had no knowledge of the actual dollar amount of Kannapien's benefits.
Neither Kannapien, nor Rozhon, had considered retiring before 2003, but each contacted Satterlee after the plant meeting. Satterlee met with Kannapien and Rozhon separately and presented each with personalized written documentation prepared by Quaker's Employee Administration Center, that described the additional benefits available to them if they retired early: namely, the change-in-control benefits under the Retirement Plan and the benefits under the Severance Plan. Nothing in the documents prepared by the Employee Administration Center stated anything about the basic benefits employees would receive under the Retirement Plan, nor did anything in these documents purport to supplant or modify the terms of the Retirement Plan. The documentation prepared by the Employee Administration Center informed Kannapien and Rozhon that the change-in-control benefits would be paid from the Retirement Plan and would be based on "years of service." While the documents did not define the term "years of service," the Retirement Plan stipulates that "years of service" include only relevant years for vesting purposes—the years of credited service, determined once an employee has begun participating in the Quaker Retirement Plan.
At his meetings with Kannapien and Rozhon, Satterlee did not discuss their respective standard benefits under the Retirement Plan, nor did Satterlee represent that the offer of additional Severance Plan and change-in-control benefits would alter the unambiguous language of the Retirement Plan. In fact, Satterlee told both women that he "couldn't calculate their pension benefit," and advised each of them to contact the Employee Administration Center to obtain an estimate. However, at his meetings with Kannapien and Rozhon, Satterlee mistakenly informed each of them that their change-in-control benefits would be calculated based on their original Golden Grain hire dates instead of the proper date under the terms of the Retirement Plan, July 1, 1990. Kannapien and Rozhon admitted in separate depositions that Satterlee made an honest mistake in misstating the pertinent dates to them, and that they...
To continue reading
Request your trial
-
Mondry v. American Family Mut. Ins. Co.
...CIGNA and American Family violated the duties they owed to her as fiduciaries under 29 U.S.C. § 1104(a)(1). See Kannapien v. Quaker Oats Co., 507 F.3d 629, 639 (7th Cir.2007) (outlining elements of claim for breach of fiduciary duty), cert. denied, ___ U.S. ___, 129 S.Ct. 62, 172 L.Ed.2d 25......
-
Chesemore v. Alliance Holdings, Inc.
...(2) that defendants breached their fiduciary duties; and (3) that their breach caused harm to the plaintiffs.” Kannapien v. Quaker Oats Co., 507 F.3d 629, 639 (7th Cir.2007). According to ERISA's definition of a fiduciary, a person is a fiduciary with respect to a plan to the extent he exer......
-
Lysengen ex rel. Morton Buildings, Inc. Leverage Emp. Stock Ownership Plan v. Argent Trust Co.
...in harm to the plaintiff." Kenseth v. Dean Health Plan, Inc. , 610 F.3d 452, 464 (7th Cir. 2010) (citing Kannapien v. Quaker Oats Co. , 507 F.3d 629, 639 (7th Cir. 2007) ). Plaintiff's allegations raise serious questions regarding whether Argent paid a fair price and adequately considered t......
-
Gross v. St. Agnes Health Care, Inc.
...based onan oral or informal modification "falls within ERISA's broad preemption provision." Id. at 1010. Compare Kannapien v. Quaker Oats Co., 507 F.3d 629, 640 (7th Cir. 2007) (holding that employees' promissory estoppel claims were preempted because they "pursue[d] benefits to be paid fro......